How A Possible Brexit Is Impacting Dealmakers

According to a recent Intralinks survey of almost 1,500 global dealmakers, global M&A activity could be severely impacted should Britain take the decision to leave the European Union (EU). In the survey, 65% of global M&A professionals believe the value of European assets will be negatively impacted if Britain voted to leave Europe. Additionally, 76% of global dealmakers stated that a British exit from the EU will have a negative economic impact and 67% of dealmakers believe it will negatively impact M&A levels across all of Europe.

The results are starker among respondents directly impacted by the Brexit referendum, being held on the 23rd June. 87% of dealmakers in Europe, Middle East and Africa (EMEA) and an overwhelming 92% of UK dealmakers believe a British exit from the European Union will have a negative economic impact. This has wider implications on the European economy, particularly major economies such as Germany, which heavily rely on cross-border deals from China.

Concern over a potential Brexit are not limited to dealmakers in EMEA. 74% of U.S. M&A professionals think that a Brexit will have a negative impact on the U.S. economy. First, The Federal Reserve is waiting on the result of the Brexit vote to decide what to do about rate hikes this year. Other specific concerns if Britain votes to leave the EU include the following:

It presents a major question on how to handle intra-Europe M&A tax issues.

Trade would be heavily impacted as Britain will have to enter into separate trade agreements with the remaining 27 EU nations.

It will change the way any U.S. financial services firm with a heavy presence in the UK conducts business.

It would create complications in single-bloc negotiations for various matters such as trade, security, etc.

Despite these concerns, dealmakers across the globe are all in agreement about the likely outcome of the referendum: 80% of global dealmakers believe Britain will not exit the EU. However, it will not be business as usual until after the vote is final.